How To Stack The Odds In Your Favor
On Monday, the Nasdaq traded back-and-forth throughout the
morning/early afternoon. It then generally worked its way higher for the
remainder of the day.
The S&P put in a somewhat similar performance. This
action puts it right at its 200-day moving average.
So what do we do?
I realize that many were excited because the market
rallied in the face of danger (gaining a whopping 1/4 to almost 1/2 of a
percent!). However, since my job is to read the charts, I
have to continue to believe in what I see. And, so far, the market only appears
to be pulling back from lows. Therefore, continue to look for shorting opportunities.
As far as setups, the PHLX Semiconductor Index ($SOX) is in
the process of setting up as a bearish pattern I call a “Witch Hat.”
Considering the above, semiconductor
Cymer
(
CYMI |
Quote |
Chart |
News |
PowerRating),
mentioned Friday, still looks like it has the potential to resume its persistent downtrend out of a
pullback/Trend Knockout(TKO).
As you see, tonight we have all three pieces: Market,
Sector, and Individual stock tending in the same direction and set up. Does this
guarantee success? Of course not, but in my opinion (I’m no longer allowed to
give the opinion of others), I think it’s the best way to stack the odds in your
favor.
Best of luck with your trading on Tuesday!
Dave Landry
P.S. Reminder: Protective stops on every trade!
P.P.S. My new 20-hour course is now shipping.
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